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She created the Institute for OneWorld Health , the first nonprofit pharmaceutical company whose mission is to ensure that drugs targeting infectious diseases in the developing world get to the people who need them, regardless of their ability to pay for the drugs. It successfully developed, tested, and secured Indian government regulatory approval for its first drug, paromomycin, which provides a cost-effective cure for visceral leishmaniasis, a disease that kills more than , people each year.
Although it is too early to tell whether Hale will succeed in creating a new equilibrium that assures more equitable treatment of diseases afflicting the poor, she clearly meets the criteria of a social entrepreneur. First, Hale has identified a stable but unjust equilibrium in the pharmaceutical industry; second, she has seen and seized the opportunity to intervene, applying inspiration, creativity, direct action, and courage in launching a new venture to provide options for a disadvantaged population; and third, she is demonstrating fortitude in proving the potential of her model with an early success.
But the signs are promising. In defining social entrepreneurship, it is also important to establish boundaries and provide examples of activities that may be highly meritorious but do not fit our definition. Failing to identify boundaries would leave the term social entrepreneurship so wide open as to be essentially meaningless. There are two primary forms of socially valuable activity that we believe need to be distinguished from social entrepreneurship.
The first type of social venture is social service provision. In this case, a courageous and committed individual identifies an unfortunate stable equilibrium — AIDS orphans in Africa, for example — and sets up a program to address it — for example, a school for the children to ensure that they are cared for and educated.
The new school would certainly help the children it serves and may very well enable some of them to break free from poverty and transform their lives. But unless it is designed to achieve large scale or is so compelling as to launch legions of imitators and replicators, it is not likely to lead to a new superior equilibrium. These types of social service ventures never break out of their limited frame: Their impact remains constrained, their service area stays confined to a local population, and their scope is determined by whatever resources they are able to attract.
These ventures are inherently vulnerable, which may mean disruption or loss of service to the populations they serve. Millions of such organizations exist around the world — well intended, noble in purpose, and frequently exemplary in execution — but they should not be confused with social entrepreneurship. It would be possible to reformulate a school for AIDS orphans as social entrepreneurship.
But that would require a plan by which the school itself would spawn an entire network of schools and secure the basis for its ongoing support. The outcome would be a stable new equilibrium whereby even if one school closed, there would be a robust system in place through which AIDS orphans would routinely receive an education.
Imagine that Andrew Carnegie had built only one library rather than conceiving the public library system that today serves untold millions of American citizens.
A second class of social venture is social activism. In this case, the motivator of the activity is the same — an unfortunate and stable equilibrium. Instead of taking direct action, as the social entrepreneur would, the social activist attempts to create change through indirect action, by influencing others — governments, NGOs, consumers, workers, etc. Social activists may or may not create ventures or organizations to advance the changes they seek. Successful activism can yield substantial improvements to existing systems and even result in a new equilibrium, but the strategic nature of the action is distinct in its emphasis on influence rather than on direct action.
Why not call these people social entrepreneurs? They are social activists. Calling them something entirely new — i. Having created a definition of social entrepreneurship and distinguished it from social service provision and social activism, we should recognize that in practice, many social actors incorporate strategies associated with these pure forms or create hybrid models.
The three definitions can be seen in their pure forms in the diagram to the right. In the pure form, the successful social entrepreneur takes direct action and generates a new and sustained equilibrium; the social activist influences others to generate a new and sustained equilibrium; and the social service provider takes direct action to improve the outcomes of the current equilibrium.
It is important to distinguish between these types of social ventures in their pure forms, but in the real world there are probably more hybrid models than pure forms. It is arguable that Yunus, for example, used social activism to accelerate and amplify the impact of Grameen Bank, a classic example of social entrepreneurship. By using a sequential hybrid — social entrepreneurship followed by social activism — Yunus turned microcredit into a global force for change.
Other organizations are hybrids using both social entrepreneurship and social activism at the same time. Standards-setting or certification organizations are an example of this. Although the actions of the standards-setting organization itself do not create societal change — those who are encouraged or forced to abide by the standards take the actions that produce the actual societal change — the organization can demonstrate social entrepreneurship in creating a compelling approach to standards-setting and in marketing the standards to regulators and market participants.
By creating the RugMark certification program and a public relations campaign designed to educate consumers who unwittingly perpetuate an unjust equilibrium, Satyarthi leveraged his effectiveness as a service provider by embracing the indirect strategy of the activist.
Purchasing a carpet that has the RugMark label assures buyers that their carpet has been created without child slavery and under fair labor conditions. Educate enough of those prospective buyers, he reasoned, and one has a shot at transforming the entire carpet-weaving industry.
Social service provision combined with social activism at a more tactical level can also produce an outcome equivalent to that of social entrepreneurship. Take, for example, a social service provider running a single school for an underprivileged group that creates great outcomes for that small group of students. If the organization uses those outcomes to create a social activist movement that campaigns for broad government support for the wide adoption of similar programs, then the social service provider can produce an overall equilibrium change and have the same effect as a social entrepreneur.
Strickland is spearheading an advocacy campaign designed to leverage federal support to scale up his model. So far, four new centers are operating across the U. With a sustainable system of centers in cities across the country, Strickland will have succeeded in establishing a new equilibrium. Why bother to tease out these distinctions between various pure and hybrid models?
Because with such definitions in hand we are all better equipped to assess distinctive types of social activity. Understanding the means by which an endeavor produces its social benefit and the nature of the social benefit it is targeting enables supporters — among whom we count the Skoll Foundation — to predict the sustainability and extent of those benefits, to anticipate how an organization may need to adapt over time, and to make a more reasoned projection of the potential for an entrepreneurial outcome.
Long shunned by economists, whose interests have gravitated toward market-based, price-driven models that submit more readily to data-driven interpretation, entrepreneurship has experienced something of a renaissance of interest in recent years.
We are concerned that serious thinkers will also overlook social entrepreneurship, and we fear that the indiscriminate use of the term may undermine its significance and potential importance to those seeking to understand how societies change and progress. Social entrepreneurship, we believe, is as vital to the progress of societies as is entrepreneurship to the progress of economies, and it merits more rigorous, serious attention than it has attracted so far.
Clearly, there is much to be learned and understood about social entrepreneurship, including why its study may not be taken seriously. Our view is that a clearer definition of social entrepreneurship will aid the development of the field. The social entrepreneur should be understood as someone who targets an unfortunate but stable equilibrium that causes the neglect, marginalization, or suffering of a segment of humanity; who brings to bear on this situation his or her inspiration, direct action, creativity, courage, and fortitude; and who aims for and ultimately affects the establishment of a new stable equilibrium that secures permanent benefit for the targeted group and society at large.
This definition helps distinguish social entrepreneurship from social service provision and social activism. The authors would like to thank their Skoll Foundation colleagues Richard Fahey, chief operating officer, and Ruth Norris, senior program officer, who read prior drafts of this essay and contributed important ideas to its evolution.
By closing this banner, scrolling this page, clicking a link or continuing to otherwise browse this site, you agree to the use of cookies. Social Entrepreneurship: The Case for Definition. Stanford Social Innovation Review , 5 2 , 29— Download RIS File. The Kiva platform provides a technology to break through these barriers. Kiva manages the transaction and legal costs and requirements with its global network of MFIs and validates borrowers through locally based partners.
Transaction costs on both sides have plummeted as more lenders and borrowers have begun to use the platform. The third mechanism is similar to the second. However, instead of creating a new technology, the social entrepreneur repurposes an existing one from a different context. Food and Drug Administration staffer, created the Institute for OneWorld Health iOWH in order to scour pharmaceutical company shelves for drugs deemed unsuitable for developed world markets and incapable of generating profits in the developing world.
She reasoned that some of this latent intellectual property could be repurposed to fight diseases endemic in the poorest parts of the world. An early target for iOWH, which subsequently merged with the global health organization Path , was visceral leishmaniasis black fever , a fly-borne disease that infects half a million people and kills 30, each year, principally in rural India and East Africa.
Hale identified a drug that had been fully developed but was no longer in production, paromomycin, which she believed could be used to cure black fever. Clinical trials in India proved her right. The U. Imazon repurposed the same infrastructure to track real-time changes in the Amazon basin—with a particular focus on the construction of new roads in the rain forest.
Historically, given the size and remoteness of this terrain, illegal loggers could build an illegal road and use it for illegal cutting for years before being discovered and shut down. Many SASE winners draw upon several of them to achieve a new, sustainable equilibrium for their target constituents. Only now emerging from decades of dictatorship, the government has neither the financial resources nor the capability to support this population.
Private-sector businesses entering the region are focused on the larger and more sophisticated rice farmers whose output can be aggregated to meet market demands. And donors are more likely to be attracted to health or education programs than to the needs of smallholders. Rural farmers are left to eke out an existence on their own, effectively denied the information, tools, and training that would decrease their vulnerability and increase their productivity.
The Taylors were determined to transform this miserable equilibrium. A lean, focused, entrepreneurial organization from the outset, Proximity started life as a country office for International Development Enterprises , a well-established agricultural products NGO, which cut its start-up costs significantly.
Understanding its poor rural customers enables Proximity to meet their needs across the board. The organization designs its pumps and other irrigation products to be effective, durable, and affordable, and tests its seeds to ensure healthy crops. Finally, the organization engages deftly with the government, which considers it a trusted adviser on issues of food security and a resource for training agricultural officers.
The government officials, social activists, and business entrepreneurs associated with the great social transformations that have improved our world may not have imagined how much their innovations would accomplish; many did not live to see it happen.
Martin Luther King Jr. But their hybrid method is helping to create change in ways that would be difficult for government or business. To be sure, pursuing a social goal while being constrained by the requirement of financial sustainability is difficult. Yet the evidence we see from our work at the Skoll Foundation shows that many entrepreneurs are succeeding, in settings all over the world, at creating scalable social ventures to transform unhappy circumstances for a great number of people.
You have 1 free article s left this month. You are reading your last free article for this month. Subscribe for unlimited access. Create an account to read 2 more. Business and society. Two Keys to Sustainable Social Enterprise. How successful businesses change their own ecosystems by Sally R. Osberg and Roger L. Angus Grieg. Idea in Brief The Problem Economically marginalized segments of society are often too small to create the political or commercial opportunities necessary to improve their condition.
The Challenge To be effective, social ventures must be financially sustainable so that the benefits they provide do not depend on a constant flow of subsidies from taxpayers or charitable givers. The Solution A study of 91 social ventures reviewed for the Skoll Award for Social Entrepreneurship SASE suggests that projects succeed when they change two features of an existing socioeconomic system: the actors involved and the enabling technologies applied.
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